good afternoon welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for wednesday september twenty sixth two thousand and twelve just when you thought the eurozone crisis was getting a little boring same old news what do you know riot police clashing with protesters in front of greek parliament in the first major general strike we've seen under the

new greek government now we've seen these protests before let's be honest so is it any different this time and in spain catalonia the country's most economically important region once out catalonia and a growing drive to secede announces down elections count as a referendum on independence oh snap take that madrid but madrid battling problems of its own without catalonia look at this barricades outside parliament to keep out the protesters what impact will all of this apparently growing dissent have plus we've talked about bank capital flight in europe but what about human capital flight not just within the euro zone but from other countries and continents which have faced turmoil of their own will discuss the impact of this immigration on the eurozone crisis and all things europe related with matina status of the dow jones and wall street journal from brussels let's get to today's capital account.

for those of you who have euro zone crisis fatigue and i have to tell you i'm guilty of it time to wake up. you're looking at pictures from the first major general strike and protest in greece since its new coalition government was formed this was reportedly organized by civil service and other public sector unions over fresh wage and pension cuts higher fuel taxes and planned job cuts for public workers there was some tear gas some around as what we've really come to expect now.

in spain as i was say you're looking at pictures now protests against what's tapped publicly. popularly as austerity this is outside a barricade in parliament in madrid while spanish government bond yields i should mention broke above six per cent so all of these demonstrations of dissent belie politicians solutions for the eurozone crisis which hinge on integration and more issues lend evidence to a mood of disintegration let me give you another example immigration not just the human capital flight out of say greece into another girl's own country with more opportunity for jobs i'm talking about immigration into the euro zone from other countries and continents facing conflicts of their own be they civil war or arab spring uprisings and greece is again take a look at this the rise in a legal border crossings. into greece so in two thousand and eleven the number of

people entering the e.u. illegally was up thirty five percent from the prior year that's according to the e.u.'s border control agency as reported by our next guest and forty percent of those came through greece now earlier i spoke with greek journalist matina with the dow jones of wall street journal she's been covering the eurozone crisis very intimately for a long time and i asked first how the immigration issue is affecting greece and the eurozone crisis more broadly. well i mean illegal immigration into the european union through greece has always been an issue it's not a new crisis is just taking really new and bigger proportions not only because greece has just less money to spend on controlling its borders but also because political crises conflict and economic this placement in the middle east and north africa is touching people out and people towards what they think is

a european dream and many of these people are going to actually want to sustain greece but greece is the geographical border they have to cross to get into the e.u. greece being an external border for the e.u. so what you see is this massive influx of illegal immigrants people who haven't got these if you haven't got work permits who go through have to reach europe and when they get to greece weapon find is you know there's no there's no european dream really because they arrive at a country where there is no jobs for the locals or for them a country that's growing increasingly and secure about it sell and in some ways turns against those people who in in their own way may be trying to illegality and crime to survive and europe is being supportive of greece and its efforts to to control the border and to do something about it greece has failed in a lot of ways for example in dealing with asylum seekers are really your hasn't

necessarily supported greece as much as it could have done because it's actually greece is dealing with the european problem well yeah when a time when they can't really afford to and the other interesting thing about this is more broadly europe is kind of based on open border or is and movement within the euro zone and yet with this immigration problem at this time it complicates that you see more of kind of a mood disintegration and zina phobia is that impacting integration maybe more than people think. absolutely i mean the thing is right the euro the common currency is one of the crown achievements of european integration the other is exactly what you mentioned the broom the free movement of people within especially within the so-called schengen zone which is a passport resumed rising of of most european countries and so these two things

are both a risk those these two massive european accomplishments are at risk and it seems that they're at risk in greece the reality is that because there's fewer jobs at home i think americans in some way can relate to that as well and we've seen it across the world really when there's a downturn in the economy there's fewer jobs people become even more protective keeping these jobs and nationals they become even more protective of that they become going more protective of say well they're. well entitlements and they see a little aspiring to a better life as intruders and potential potential risks to do that to those huge jobs and and stars. and scaurus receipts of from welfare and do you think that it sparks more attention to between i noticed in your piece you know there is kind of that nations and the euro zone where things are going better and these are

obviously the more desirable places for immigrants to flow to and they're saying hey greece get it together we need to start checking passports or and changing the rules at revolve around the shanghai end zone because of this issue does it spark turmoil among euro zone countries and that way at absolutely does i mean in my in my story i mention comments by the austrian finance minister but we also know that germany the netherlands and learned the exact same countries and we always talk about as being very hardline when we talking about the euro crisis are also particularly hardline when they're when we're talking about illegal immigration now of course these countries mostly benefit from. the fact that their borders are shared with other e.u. member states during not external borders but they do receive illegal immigrants seeking a better right who have very often come from greece the real challenge there is to go for solidarity because really and this occasion in greece hasn't really chosen to be an external border e.u.

it's a question of geography well greece could clearly do a lot more to to guard those borders. i think the country is also looking for understanding and solidarity from its european partners on their right i'm sure and we do always hear these countries kind of have more of a hard line in the euro crisis and in this example in the immigration crisis but these are the export powerhouses of the eurozone do you think it's a little unrealistic for them to expect to continue to be these export powerhouses without taking on some of the financial liability the financial risks of the liabilities of these deficit countries that are the importers. well that's exactly the burden and debate right now and that's your question does right to the heart of it if you listen to all your rants the only relevant is that european commissioner and vice president of the european commission is in charge of economics a very spread he's the top economics official in europe you'll hear him always talk about the need for the surplus countries to also bear some of the burden of the

adjustment and what he's talking about are example is in germany allow our wages to rise faster so that consumption at home can balance out some of that surplus clearly not every country in the eurozone or in europe can be germany it's just not possible that's not a model that can be replicated in every single place and some of that burden of adjustment has to be taken on from these countries the question of taking on risk which is related to bailing countries out as well because these countries are creditor countries is also a very good a very political european issue can and of politicians in these countries explain to their electorates that their pain through their taxes to support a weaker early for all countries that also consume their products and they explain that the reason that the euro is trading where it is against the dollar and is not trading where the franc once was and the reason why their export led economies are

able to are able to benefit from a weaker euro is partly because of these weaker countries these are very tough conversations to have an electorate that not everyone is brave enough or able a politically to have a conversation with their electorate especially in northern europe and that those stronger creditor countries i don't think it's necessary right of course and of course for anybody that was wondering if the eurozone crisis had kind of died down and they started to feel like it was boring or becoming just kind of a broken record why do we have today we have protests then great. so you know no questions about whether or not the eurozone crisis rages on and i think we're going to be showing pictures of what's going on in greece today now these are the first protests that we've seen the first major protests at least since the new government was elected and we do have a new coalition government in greece now what we have seen before though are these protests on the streets and it didn't really ever seem to do much either from you

know from how i see it in washington in terms of how the greek government push forward reforms do you think that there is anything we should be expecting now in terms of a different outcome now that we have a different government. now really i mean the reality is that these protests as specially in the case of greece like you say it's we've been doing this for a joint and a half years there have been those really you know big protests people taking to the streets to vote and to defend what they think is their fundamental ready to. a stronger assessor certain quality of life to work and people feeling that those rights are being taken away from them we've seen those before and the images for people who watch the things on the news i've heard a repetitive it's mostly the saying the same thing and normally those protests are timed the time when the government the incumbent government whatever it is is trying to push through with more cuts right now the greek government is negotiating

with the reeses creditors the eurozone countries and the international monetary fund a fresh round of a fiscal adjustment of fiscal pain for greeks of about fifteen billion dollars up to twenty fourteen people take to the streets frankly i think this government will stay the course and so far as a captain of those reforms and those fiscal cuts and will stick to the path laid out by the by the troika of creditors the question really is how. is the country going to return to growth that if the economy continues on this path it's been greece and greece it's been a five year long recession which is frankly i'm precedented for a country that's not in war at war. nor the outcome of this is lower tax receipts it's a bigger you know unemployment benefit bills and definitely that's not conducive to

say privatisations in an environment of such and security and contraction so these are a bit tough questions and really what we see is that the greek populations or most of you know the greek society is losing patience because they've been asked to foot the bill before and it hasn't really worked. that said another part of the greek population continues to tax evader and remain largely unaffected by the rises and that is something this government has to really really tackle. so same issues and grace no real different outcome yet but still ahead what about spain we'll hear more from eighteen at stats on the protests in spain and what the dissent means but first closing market numbers.

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back we're talking to euro zone reporter mightiness davis now let's go straight to spain. not only do we see protests that have been going on there and we have footage of that that were showing and from what i've read parliament was barricaded i think you can see the barricades in those images but also catalonia wants to six see it at least as a growing secession movement that now they're having elections which could be a referendum on independence and catalonia is a very canonical important region to spain were responsible for a fan of the g.d.p. so how do you see what appears to be the growing dissension in spain impacting both the country's ability to manage its economic crisis but also its borrowing costs well as thing is reconcile the keys with catalonia and spain is like. euro zone

problem you have a really rich and prosperous region. as potentially viable i was spending. as an independent country so frankly it's a question of transfer as you're asking the richer more prosperous got to learn the ins to foot the bill for the rest of the country to some extent i think it's indicative of the fact that spain which is a massive country in administrative really a collection of a very very independent very free and autonomy as regions as having. pushing through a stereo be. and. in terms of volatility and the question of whether it is government and spain can keep it together during very taxing the very difficult times for the country on the verge of a proper bailout not

a bailout just for the countries it's right and we keep hearing rumblings in kind of reports of discussions about a spanish bailout and earlier we're talking about the way that the politicians sell a bailout to their electorate is there a difference in the way that spain we need to spain's politicians i should say we need to sell a bailout to their electorate versus the way that would work best for their creditors to sell a bailout to their respective electorate. well the political situation in spain and in the rest of europe with regards to spain is quite precarious spain theoretically would be eligible for what the eurozone is colling a precautionary credit line he worried here being precautionary you take it you take this assistance you to commit to certain conditions and certain reforms and fiscal adjustment but if you take it before it becomes an emergency so that there isn't an emergency the spammers are finding it very hard to go for that option they're saying we are going to do all that we're going to do all the hard work

we're going to push through our budget we're going to push through structural reforms that we're going to do it of our own volition we're not doing it because the creditors are asking us to that makes it easier to sell to the spanish population although it will be very painful but also this madrid seems to want to wait until it becomes absolutely necessary to ask for a bailout and the prime minister money out of that hole he said so in an interview with the wall street journal published today he said. if it bahrain is too expensive borrowing costs are too high for too long be one hundred percent sure that i will ask for a bailout and indeed well we've seen you know he owns a ten year bonds in spain come down over the last few weeks today that crossed over the six percent kind of line so we see them climbing back so that's what's happening in madrid what's happening in other capitals for example in the german capital in berlin is that the idea of selling an emergency bailout for spain is

actually quite attractive and elemental the german chancellor would she believes find it easier to go to her argument areas we need to approve any assistance and say look we need to bail out spain that's not a precautionary think we need to bail them out because they're having so much trouble finding themselves in the market and frankly they're the fourth largest economy in the euro. and we can do without right so there's a little bit there's a political calculation that are different from country to country that could be and can grow and with. an outcome that everybody wants and of course one of the concerns too that at least we saw in a major way a year ago at this time was the impact of a greek exit or a spanish exit on markets and creating kind of a lehman moment like we saw in two thousand and eight with massive d. leveraging and financial panic now everybody has had time to process that there could be a grex it we've seen specks it all over the headlines so is this still a major concern or would it be something that financial markets could stomach at

this point. well let's separate the two first rate so we've been talking about a graph that for so long i think the markets have had time to internalize and are just investors have had time to adjust their positions john dissipate that if they believe that that's a likely outcome some people out there do i can tell you from where i'm standing in brussels that while this conversation behind closed door is where it was intensifying before the summer and right now it seems that there is a consensus that it's that greece should not the euro and a consensus that something should be done to keep greece in the euro whereas before the summer even paulson policymakers here in brussels said actually you know greece leaves that you're it's a magpie market positive event because the market's going to think ok there will be an initial shock but then they'll think ok that the euro zone has gotten rid of its weakest link and now they can move closer together and tackle the crisis with that

happened the burden of greece i don't feel that that's the atmosphere in the climate of the conversation right now in european capitals and here in brussels where guides to the prospect of a spanish accent i genuinely don't see that happening anytime soon and of course you know i that we've been i've everyone's been proved wrong before but i think that the discussion about a spanish exit is is really extremely speculative and theoretical not least because like i said spain may be cold the eurozone periphery but it is in fact a massive economy spain is massively also linked to the british economy through banking and as well as to the smaller and already bailed out or trickle so you're talking about huge an unpredictable ripple effects of such developments across the eurozone and across the world across the global economy right now the

mood is let's keep everyone and let's keep trying of course this comes at a cost and i don't see many people jumping up and down to the t.v. to grab that bill but the true euro zone style i think they will try to muddle through for a bit longer. i was machinist as a journalist for dow jones newswires. let's wrap up with loose change dimitri lauren lyster are you football fan no i don't like football i'm not really i don't like football murderball born yeah i'm not really there so that's why i didn't really know that this was the biggest deal in

the world but judging by the chatter in our newsroom it sure is and by now you've probably heard about the botched play call by n.f.l. refs during the green bay seattle game well that bad call apparently cost three hundred million dollars for vegas oddsmakers the bettors lost one hundred fifty million dollars and the bookies won one hundred fifty million dollars and the plot thickens dimitry it's not just about the gamble it's about who was involved because it turns out one of those refs who are now famous for making that bad call is the vice president of small business banking for bank of america in santa maria california he was a banker dimitri he's the raf and now the bookies making out like a bandit this sounds a lot like the lead up to the financial crisis to me i think you start laying out on the field in football i think is ironic going you know there's a big stadium i think there should be risking their trading what if he was what i

just was right i mean we're we're having fun just to be clear we're not trying to do so we're not in florida we're going to defame this guy but the reality of it it's just it is just crazy that of banker goes in as a rat and all of a sudden the better is the just average folks trying to beat on him. make a play make some money on the football they love are losing big and a questionable play that people disagree with the call and the bookies making out like a bandit i mean you said it all not a coincidence that wall street is at it again now they destroyed the economy and now they're going to destroy their crew the only recreational bunch left they sports in america they can't get away with the abacus type deals anymore that was the famous goldman sachs one because there's just maybe too much scrutiny although that's questionable even so now they're looking for any inroads that they can make well if they're invading sports the virgin territory ok the pleasure people go to

their families to get away from all the mayhem but these wall street battles are created another gun on the field and they're screwed up again for this is frightening for me well and it just goes to show that you get what you pay for you know this is all boils down to a labor dispute between the n.f.l. and the referees so now these guys are basically staff you know what. bob and from what i've heard from our producer who is an avid fan well what's it called didn't regular traffic so i know this isn't exactly a bob is kind of could backfire on obama romney could use this and say look you know i'm not a big fan of wall street obama is he he brought in these wall street guys take over the rug regular refs they screwed everything up and you know we have i read anywhere he brought in he broke the you know because mitt romney would have said told the n.f.l. if we're using the reagan analogy would have told the n.f.l. let those referees walk like reagan did with the air traffic controllers they're on the road is never denied with the right of way with the rabbis in this situation i don't know i think mitt romney can just flip flop because

a flip flopper well that was the whole thing you did about that and you want to open the window our producer our producer your producer just seems got an interesting angle on this i'm not going to say because i don't think so thunder but she's got an interesting angle as to why mitt romney actually thinks it's a good idea to open windows in moving planes that are above the cloud was dimitriy you have to say you can't just teed. i can tell you that on oahu nobody knows what we're going to not hear a decision to do it is for various books will be on facebook and she'll talk through our streets are going to stray from facebook so people can hear her theory there i guess but for now that's all we have time for thank you so much for watching be sure to come back tomorrow we will have a special show from the big apple and in the mean time you know you can follow me on twitter at lauren the story you can go like us on our facebook page there it is facebook dot com slash capital account there is a competing account don't like that one that's the better looking one are the better looking yes and have a great night. wealthy

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